Proceedings of the 12th European Conference on Knowledge ...

Meysam Poorkavoos, Yanqing Duan and John Edwards
access <strong>the</strong>ir ways <strong>of</strong> doing things and different approaches <strong>of</strong> problem solving. Based on <strong>the</strong> above
arguments it is proposed that:
Hypo<strong>the</strong>sis 3a: The greater <strong>the</strong> size <strong>of</strong> <strong>the</strong> ego network, <strong>the</strong> higher <strong>the</strong> incremental
innovation
Hypo<strong>the</strong>sis 3b: The greater <strong>the</strong> size <strong>of</strong> <strong>the</strong> ego network, <strong>the</strong> higher <strong>the</strong> radical innovation
3.2 Relational properties
3.2.1 Strength <strong>of</strong> tie
Configuration <strong>of</strong> ties (e.g. strength vs. weak, cohesive vs. bridging) is important because actors can
extract various forms <strong>of</strong> benefits from each type <strong>of</strong> <strong>the</strong>se ties (Baker 1990). At <strong>the</strong> inter-organizational
level Rowley et al. (2000) defined tie strength between firms as “frequency <strong>of</strong> interaction between
partners and <strong>the</strong>ir level <strong>of</strong> resource commitment to <strong>the</strong> relationship”. Strong ties are sources <strong>of</strong> private
information and critical resources and increase trust and reciprocity between firms (Gulati et al. 2002).
In an exploitation environment that firms try to use <strong>the</strong>ir current information, technologies, skills and
abilities (March 1991), firms belong to a network with strong ties are more likely to perform better
(Gulati et al. 2002). In incremental innovation in order to exploit <strong>the</strong> current information in <strong>the</strong>
company deeper knowledge about firm’s current direction is necessary (Rowley et al. 2000). Uzzi
(1996) argued that this type <strong>of</strong> information is provided by intense linkages. Although frequent
interactions with network partners and commitment <strong>of</strong> resources (Granovetter 1985, Krachardt 1992)
are necessary for building strong ties, but <strong>the</strong>y are very good at providing rich customized information
(Rowley et al. 2000) and confirming <strong>the</strong> opinions <strong>of</strong> <strong>the</strong>ir group members (Julien et al. 2004) which
both <strong>of</strong> <strong>the</strong>m are vital to refine <strong>the</strong>ir current technologies and reduce <strong>the</strong> production costs. According
to this, <strong>the</strong> following hypo<strong>the</strong>ses are proposed.
Hypo<strong>the</strong>sis 4a: The higher <strong>the</strong> number <strong>of</strong> strong ties, <strong>the</strong> higher <strong>the</strong> incremental
innovation
Hypo<strong>the</strong>sis 4b: The higher <strong>the</strong> number <strong>of</strong> strong ties, <strong>the</strong> higher <strong>the</strong> radical innovation
Weak ties are sources <strong>of</strong> new information and opportunities in market, (Granovetter 1985) it reduces
<strong>the</strong> firms’ resource dependence on strong partners (Baker 1990). Configuration <strong>of</strong> ties depends on <strong>the</strong>
environment that firms are situated. In an explorative environment firms are looking for new
knowledge and information, thus <strong>the</strong> strong ties are not helpful in this situation. Weak ties not only can
be a medium for new knowledge from o<strong>the</strong>r companies but also can act as a bridge between o<strong>the</strong>r
social entities and can be a trigger to mix new ideas that lead to change and innovation (Rothwell
1991). According to <strong>the</strong> above discussion <strong>the</strong> following hypo<strong>the</strong>ses are proposed.
Hypo<strong>the</strong>sis 5a: The higher <strong>the</strong> number <strong>of</strong> weak ties, <strong>the</strong> higher <strong>the</strong> radical innovation
Hypo<strong>the</strong>sis 5b: The higher <strong>the</strong> number <strong>of</strong> weak ties, <strong>the</strong> higher <strong>the</strong> incremental
innovation
3.2.2 Diversity <strong>of</strong> ties
Diversity <strong>of</strong> ties refers to different types <strong>of</strong> relationships that connect a focal firm to its partners. Tie
diversity will provide <strong>the</strong> focal firm with complementary resources and opportunities to overcome
resource barriers and uncertainties in <strong>the</strong>ir business. Innovation is a complicated process and firms
require knowledge and resources in different areas to be able to develop or improve new products or
services. Successful innovation requires <strong>the</strong> focal firm to understand <strong>the</strong> market needs, knowledge <strong>of</strong>
manufacturing process, technical knowledge <strong>of</strong> products and access to inputs (Srivastava 2007).
Sammarra and Biggiero (2008) in <strong>the</strong>ir research found that in an inter-firm relationship three different
types <strong>of</strong> knowledge are being transferred (managerial, technological and market knowledge). They
argued that all <strong>the</strong>se different types <strong>of</strong> knowledge are necessary for a successful innovation.
According to this argument firms not only have different types <strong>of</strong> ties with different partners but also
<strong>the</strong>y have diversity <strong>of</strong> ties with a single partner. Fur<strong>the</strong>rmore, Diversity <strong>of</strong> ties helps <strong>the</strong> focal firm to
acquire a better perspective and wholesome development (Srivastava 2007). According to this,
greater diversity <strong>of</strong> ties can help <strong>the</strong> focal firm to develop and enhance its abilities to generate radical
innovations. Therefore it is proposed that:
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